This year started off with a number of amazing technologies revealed at CES and elsewhere, including curved 4k TVs, 3D Printers that can build houses (or really inexpensive versions for home use) and of course, all the wearable devices we are hearing about.

Over the past few months, however, there has been a ton of progress in another area that I find really interesting: beacons. Maybe not as exciting as printing out a 2,400 square foot home in 24 hours, but still, it could have a big impact.

The promise of beacon technology is to bridge physical locations and interaction with digital experiences (my promise to you is this: I won’t start using terms like “Phydigital”). The general concept is that knowing the exact location of people can greatly enable better and more targeted communications with customers. As we have all experienced, GPS indoors can be a bit off; while some think of beacon technology as “indoor GPS,” it is much more than that.

Think of walking into your local coffee shop and as you enter the store, the app on your device opens up and welcomes you by name. Furthermore, maybe that store is overstocked in one particular item (it’s 3:00 and they have an abundance of coffee cake); they may promote that item as you are waiting to order your coffee.

When most people think about beacons, they are talking about empowering an app on your device to tune the experience. This could, of course, direct you to an item you were looking at in the app or on a website, so you can purchase it (think a big box store). The idea is that all of a sudden, marketers can start to help consumers connect with what they are doing online, in app and in the physical location.

As expected, there are competing technologies and ways of thinking of beacon technology. Some leverage GPS, some Wi-Fi and some both, combined with GPS. Some are talking about one beacon per physical location (based on entry through the front doors) while others are focusing on multiple beacons, to really understand movement through physical locations.

Apple rolled out iBeacon as part of iOS7 and describes it this way:

“iBeacon is a new technology that extends Location Services in iOS. Your iOS device can alert apps when you approach or leave a location with an iBeacon. In addition to monitoring location, an app can estimate your proximity to an iBeacon (for example, a display or checkout counter in a retail store). Instead of using latitude and longitude to define the location, iBeacon uses a Bluetooth low energy signal, which iOS devices detect.”

At first, you may say, “Well, that is interesting, but Apple iOS has less than 15 percent market share and while iBeacon is an Apple Trademark, it is based on an open standard.” (Meaning Android devices with Bluetooth can pick up the same signals; it will be the responsibility of the app developers to take advantage of them as they start to roll out.)

However, there are other technologies in play that will compete and push all involved based on different pieces of hardware or different methods. As an example, ShopKick began by using an a high-pitch frequency (inaudible) that can be picked up by a smartphone’s microphone, either through the store’s existing music system or through a small transmitter. Now, it also leverages the iBeacon technology. Nomi, Estimote and Euclid each have their own hardware/technology solutions, as well as others in the market.

While serving promotions, surfacing overstocked items and guiding people to in-store products, there are some other benefits to consumers and marketers:

1. Understand Multi-location Visits

The leadership at Nomi talk a lot about understanding cross-store shopping or visits. This can be key to seeing if customers are cross-shopping auto dealerships for the same brand, or understanding if new locations are cannibalizing existing locations. It helps to make smarter decisions down the road.

2. VIP Awareness

The idea of knowing when a “Platinum” or top-tier member walks into your bank or hotel could be extremely powerful. Think of a hotel greeting someone at the door with, “Welcome back, Mr. Shaner. Thank you for being a ‘platinum member.'” Or even better, don’t mention the name or member, but rather make sure they get the best possible service! If you could get all your sales people or customer service people to know who the highest value people in the location are, there is an opportunity to do a better job of servicing your loyalists. These examples surely require an app to be installed on those users devices, but the next one does not.

3. Tracking Visits without Apps

This one is much less specific, but very important. It is possible to leverage Wi-Fi to see how many devices in a location have Wi-Fi turned on (even if not connected to the network). Devices send out anonymous Wi-Fi pings as they search for Wi-Fi networks.

Think of this like having someone sit at the front door and count people coming in. Again, from a privacy standpoint, there is no personally identifiable information; it is simply the aggregate numbers.

You may say, I carry two devices or sometimes leave them in my car, or my children are carrying them. Or even, aren’t the employees going to throw the counts way off, as they are there all day and would mess up actual customer/prospect data?

Yes, but there are ways to get around this, with baseline studies and technologies/offerings that have ways to identify employees. The Nomi technology allows you to do this within apps that are installed on devices or to get a more aggregate view through Wi-Fi. The power of having both is a big plus, in my opinion.

4. Movement Through the Store/Location

Rather than just thinking about someone walking through the front door and serving promos, greeting/recognizing them or telling them where to go, think about the insight in knowing where they are within your location.

For a hotel, knowing how many people are at one of the restaurants, pool, lobby, banquet center, etc. during certain hours or days could be interesting. Or, where are you five big VIPs spending their time?

Thinking back to a car dealership, knowing how many people are there for service, versus looking to make a purchase/shopping, versus financing, etc. could help you understand the impact of your marketing campaigns of driving sales (versus dealing with an influx of service).

5. Events

Understanding how people interact at events — and maybe even more importantly, how many people visit one of your locations — based on the attendance at a sponsored event can be incredibly useful.

6. Triggering Push Notifications

The king of this service seems to be UrbanAirship,which is powering many of the push notifications, SMS, etc. for mobile devices and apps. They have been really aggressive at integrating the beacon technology into their offerings to bring the power to life.

7. Feeding Insight Back into CRM

So far, all of this has focused on tailoring that in-store physical location experience, but those are only the benefits in that moment. You can take that information and then feed it back into your CRM program or customer profile to strengthen your overall understanding about your customer.

For a hotel, you know that a platinum member stayed at a particular location, but did you know that she went to the gym twice every day? Or that she spent over four hours at the pool everyday? Compare that to the person that leaves the hotel each morning by 7AM and doesn’t return until 10PM. My guess is you would want to talk to those people in different ways based on what matters to them.

As outlined above, there are a number of partners/technologies to check out and consider. Of course, these are very early days in leveraging, understanding and shifting the way physical location and visits can impact marketers, customer and our businesses.

Yes, we need to be careful about privacy and comfort levels of consumers, just as we do online and in other areas. If we break the trust with consumers,it doesn’t matter how good a view we have of their activities.

It is clear the companies that find and explore ways to leverage these technologies of bridging physical and digital (trying so hard not to say “Phydigital”) will have a much more holistic view of their customers’ needs, activities, responses and desires.

These are early but exciting days around this technology and I am excited to see where this all goes! The future looks bright for the marketers who will enjoy a more holistic view across channels and greater ability to take action, thanks to beacon technology.